Is land trust the way to go? - Posted by Bob

Posted by Bill Gatten on July 23, 2001 at 21:20:31:


I’m afraid you’re a bit off track here.

The current owner becomes the grantor (settlor). The trustee is whomever he nominates: could be him, you or a third party. You become the (or “a”) beneficiary in the trust.

The loan is brought current; the property is placed into the owner’s trust; you are named as the (or a) beneficiary. You then direct the trustee to sell the property to whomever your buyer may be. The trustee then is the seller (whether it’s you or someone else).

For a short-term flip or assignment you could be the trustee; however, for a long-term hold you’d need much more substantial arrangement. We’d advice having a third party corporate trustee; having you be a 90% beneficiary with the seller retaining 10% until the trusts termination (for various legal reasons), at which time he would forfiet it all to you.

We would also suggested having a paid trustee and a pro bono collection services handling all payments and disbursements (i.e., a PACTrust).

Bill Gatten

Is land trust the way to go? - Posted by Bob

Posted by Bob on July 21, 2001 at 19:52:08:

Current owner is 4 months behind on mortgage payments and is about to be foreclosed on. Current mortgage is $101K and owners will take $101K so that they don’t have to ruin their credit. Virtually no equity in the home. If my goal is to hold this property for long-term rental income, is a land trust the best way to acquire it without putting any money down? Is my understanding about how a land trust works correct - current owner becomes trustee and I am beneficiary and grantor. Title remains in trustees name, I assume payments and have full control over the property.
Thanks for your input!